Rental affordability scheme ends in budget

The Abbott government will not continue funding Labor's rental affordability scheme past June 30.

The decision is likely to upset a number of state governments who have taken advantage of a program that encourages private investment in the construction of affordable rental homes for low-income earners.

Even before Tuesday's budget there were concerns the commonwealth would not commit to a fifth round of funding.

The decision will save the federal budget $235.2 million over three years.

Any money not used in previous rounds within agreed time frames will be returned to the budget.

However, the government will provide $115 million in 2014-2015 to extend the national partnership agreement on homelessness.